[Federal Register Volume 77, Number 3 (Thursday, January 5, 2012)]
[Notices]
[Pages 473-474]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-33768]



[[Page 473]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-932]


Certain Steel Threaded Rod From the People's Republic of China: 
Initiation of Anti-Circumvention Inquiry

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

SUMMARY: In response to a request from Vulcan Threaded Products Inc. 
(``Petitioner''), the Department of Commerce (the ``Department'') is 
initiating an anti-circumvention inquiry to determine whether certain 
imports are circumventing the antidumping duty order on certain steel 
threaded rod from the People's Republic of China (``PRC'').\1\
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    \1\ See Certain Steel Threaded Rod from the People's Republic of 
China: Notice of Antidumping Duty Order, 74 FR 17154 (April 14, 
2009) (``Steel Threaded Rod Order'').

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DATES: Effective Date: January 5, 2012.

FOR FURTHER INFORMATION CONTACT: Toni Dach, AD/CVD Operations, Office 
9, Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue NW., 
Washington, DC 20230; telephone: (202) 482-1655.

SUPPLEMENTARY INFORMATION: 

Background

    On November 17, 2011, pursuant to section 781(c) of the Tariff Act 
of 1930, as amended (the ``Act''), and 19 CFR 351.225(i), Petitioner 
submitted a request for the Department to initiate an anti-
circumvention inquiry of Gem-Year Industrial Co., Ltd. (``Gem-Year'') 
to determine whether double-arming bolts (``DA bolts''), a type of 
steel threaded rod produced in the PRC containing more than 1.25 
percent chromium, are circumventing the Steel Threaded Rod Order.\2\ In 
its request, Petitioner contends that Gem-Year's higher-chromium DA 
bolts are of the same class or kind as the merchandise covered by the 
Steel Threaded Rod Order, and the addition of small amounts of chromium 
above the 1.25 percent threshold in the scope of the order is a minor 
alteration that constitutes circumvention.
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    \2\ See the Petitioner's November 17, 2011 submission 
(``Circumvention Request'') at 2.
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Scope of the Order

    The merchandise covered by the order is steel threaded rod. Steel 
threaded rod is certain threaded rod, bar, or studs, of carbon quality 
steel, having a solid, circular cross section, of any diameter, in any 
straight length, that have been forged, turned, cold-drawn, cold-
rolled, machine straightened, or otherwise cold-finished, and into 
which threaded grooves have been applied. In addition, the steel 
threaded rod, bar, or studs subject to the order are non-headed and 
threaded along greater than 25 percent of their total length. A variety 
of finishes or coatings, such as plain oil finish as a temporary rust 
protectant, zinc coating (i.e., galvanized, whether by electroplating 
or hot-dipping), paint, and other similar finishes and coatings, may be 
applied to the merchandise.
    Included in the scope of the order are steel threaded rod, bar, or 
studs, in which: (1) Iron predominates, by weight, over each of the 
other contained elements; (2) the carbon content is 2 percent or less, 
by weight; and (3) none of the elements listed below exceeds the 
quantity, by weight, respectively indicated:
     1.80 percent of manganese, or
     1.50 percent of silicon, or
     1.00 percent of copper, or
     0.50 percent of aluminum, or
     1.25 percent of chromium, or
     0.30 percent of cobalt, or
     0.40 percent of lead, or
     1.25 percent of nickel, or
     0.30 percent of tungsten, or
     0.012 percent of boron, or
     0.10 percent of molybdenum, or
     0.10 percent of niobium, or
     0.41 percent of titanium, or
     0.15 percent of vanadium, or
     0.15 percent of zirconium.
    Steel threaded rod is currently classifiable under subheading 
7318.15.5050, 7318.15.5090, and 7318.15.2095 of the United States 
Harmonized Tariff Schedule (``HTSUS''). Although the HTSUS subheading 
is provided for convenience and customs purposes, the written 
description of the merchandise is dispositive.
    Excluded from the scope of the order are: (a) Threaded rod, bar, or 
studs which are threaded only on one or both ends and the threading 
covers 25 percent or less of the total length; and (b) threaded rod, 
bar, or studs made to American Society for Testing and Materials 
(``ASTM'') A193 Grade B7, ASTM A193 Grade B7M, ASTM A193 Grade B16, or 
ASTM A320 Grade L7.

Prior Scope Ruling

    Among previous scope rulings concerning the Steel Threaded Rod 
Order, the Department on September 10, 2010, responded to a request for 
a scope ruling by Hubbell Power Systems, Inc. and determined that DA 
bolts meeting the description of the scope are within the scope of the 
Steel Threaded Rod Order.\3\
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    \3\ See Notice of Scope Rulings, 76 FR 10558, 10559 (February 
25, 2011).
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Merchandise Subject to the Minor Alterations Antidumping Circumvention 
Inquiry

    The merchandise subject to this antidumping circumvention inquiry 
consists of steel threaded rod from the PRC produced by Gem-Year 
containing greater than 1.25 percent chromium, by weight, and otherwise 
meeting the requirements of the scope of the Steel Threaded Rod Order 
as listed under the ``Scope of the Order'' section above.

Initiation of Minor Alterations Antidumping Circumvention Proceeding

    Section 781(c)(1) of the Act provides that the Department may find 
circumvention of an antidumping duty order when products which are of 
the class or kind of merchandise subject to an antidumping duty order 
have been ``altered in form or appearance in minor respects * * * 
whether or not included in the same tariff classification.'' The 
Department notes that, while the statute is silent as to what factors 
to consider in determining whether alterations are properly considered 
``minor,'' the legislative history of this provision indicates there 
are certain factors which should be considered before reaching a 
circumvention determination. In conducting a circumvention inquiry 
under section 781(c) of the Act, the Department has generally relied 
upon ``such criteria as the overall physical characteristics of the 
merchandise, the expectations of the ultimate users, the use of the 
merchandise, the channels of marketing and the cost of any modification 
relative to the total value of the imported products.'' \4\
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    \4\ See S. Rep. No.71, 100th Cong., 1st Sess. 100 (1987) (``In 
applying this provision, the Commerce Department should apply 
practical measurements regarding minor alterations, so that 
circumvention can be dealt with effectively, even where such 
alterations to an article technically transform it into a 
differently designated article.'').
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Overall Physical Characteristics

    Petitioner maintains that steel threaded rod with the addition of 
chromium is produced in the same manner and to the same specifications 
as subject steel threaded rod.\5\ Petitioner provides a declaration 
supporting these claims in its Circumvention Request.\6\
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    \5\ See Circumvention Request at 16.
    \6\ Id. at 16-17.
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Expectations of the Ultimate Users

    Petitioner indicates that it is unaware of any instances where 
customers would

[[Page 474]]

expect or request steel threaded rod with small amounts of chromium 
added, other than to circumvent the order.\7\ Petitioner argues that 
the applicable standard for DA bolts does not address the chemistry of 
the steel, focusing instead on basic dimensions, zinc coating, and 
tensile strength, none of which are affected by the additional amounts 
of chromium.\8\
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    \7\ Id. at 17.
    \8\ Id.
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Use of the Merchandise

    Petitioner states that the uses of DA bolts, i.e., fasteners in the 
utility industry, are typical applications of steel threaded rod.\9\
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    \9\ Id. at 19.
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Channels of Marketing

    Petitioner states that the channels of marketing for the chromium-
added DA bolts and the subject steel threaded rod are the same, noting 
that both products are marketed through distributors.\10\
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    \10\ Id.
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Cost of Modification

    Petitioner indicates that the addition of small amounts of chromium 
involves minimal additional cost compared to the overall costs of the 
merchandise in question.\11\
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    \11\ Id.
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Circumstances Under Which the Subject Products Entered the United 
States

    Petitioner argues that entry summary information indicates that the 
additional chromium was added to deliberately avoid antidumping duties. 
Petitioner points to documents contained in the entry summary for Gem-
Year's entries of higher-chromium DA bolts to support its claim that 
the chromium content of the DA bolts was manipulated in an attempt to 
circumvent the order.\12\ Because Gem-Year's merchandise would be 
subject to the PRC-wide deposit rate of 206.00 percent, Petitioner 
asserts that Gem-Year and its customers have a strong financial 
incentive to avoid paying antidumping duties.\13\
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    \12\ Id. at 19-20.
    \13\ Id. at 20.
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Timing of the Entries

    Petitioner asserts that the addition of chromium after the issuance 
of the Steel Threaded Rod Order and the Department's determination in 
the related scope request concerning DA bolts indicates that this 
addition of chromium is an attempt to circumvent the Steel Threaded Rod 
Order.\14\
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    \14\ Id. at 20.
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    Based on the information provided by Petitioner, the Department 
finds there is sufficient basis to initiate an antidumping anti-
circumvention inquiry, pursuant to section 781(c) of the Act, to 
determine whether the merchandise subject to the inquiry (identified in 
the ``Merchandise Subject to the Minor Alterations Antidumping 
Circumvention Inquiry'' section above) involves a minor alteration to 
subject merchandise that is so insignificant as to render the resulting 
merchandise subject to the Steel Threaded Rod Order.
    The Department will not order the suspension of liquidation of 
entries of any additional merchandise at this time. However, in 
accordance with 19 CFR 351.225(l)(2), if the Department issues a 
preliminary affirmative determination, we will then instruct U.S. 
Customs and Border Protection to suspend liquidation and require a cash 
deposit of estimated duties, at the applicable rate, for each 
unliquidated entry of the merchandise at issue, entered or withdrawn 
from warehouse for consumption on or after the date of initiation of 
the inquiry.
    The Department will, following consultation with interested 
parties, establish a schedule for questionnaires and comments on the 
issues. The Department intends to issue its final determination within 
300 days of the date of publication of this initiation notice.
    This notice is published in accordance with sections 781(c) of the 
Act and 19 CFR 351.225(i).

    Dated: December 22, 2011.
Christian Marsh,
Acting Assistant Secretary for Import Administration.
[FR Doc. 2011-33768 Filed 1-4-12; 8:45 am]
BILLING CODE 3510-DS-P